As we emerge from a spring Mother's Day weekend, colleagues and clients will regale one another with how they honored the holiday, paid tribute to mothers, a longstanding cultural institution. But did anyone notice that last week was National Small Business Week 2016? Hey, how'd you enjoy National Small Business Week? ... Was that overheard much at your Mother's Day brunches?

Movement to Protect Beleaguered Middle Class in our City Has Left Small Businesses Behind

The broad policy agenda themes under the current administration focus on hard-to-fault values like keeping New York affordable, preserving a middle class and, toward this end, protecting beleaguered residential tenants from eviction by market rate-minded revenue-optimizing landlords. (One major oft-reported core platform position that is the familiar rallying cry is to preserve and expand affordable housing stock while another initiative to this end is the creation of a new unit of residential tenant lawyers to protect underserved often legally unrepresented tenants from being "harassed," steam-rolled over and evicted by "lawyered up" landlords in accelerated housing court proceedings).

Small Businesses Are Under Fire, Numerous Lists of Recent Closings Snowballing (see below), Reach Many Dozens

It is becoming an enduring lament that small businesses - even ones that are institutions* in their neighborhoods - are constantly being squeezed out of the most increasingly in-demand popular and fashionable neighborhoods especially across Manhattan and parts of Brooklyn.

It is a phenomenon that is increasingly noticeable and resonating with New Yorkers. The N.Y. Post reported in 2014 that "Manhattan — theoretically one of the world’s greatest shopping meccas — has embarrassingly more vacant stores than one can even count." Steve Cuozzo, Why a Booming Manhattan Is Full of Empty Storefronts, N.Y. Post, 4/26/2014, avail. at http://nypost.com/2014/04/26/the-hidden-proof-the-economy-is-still-awful/.

The solution that some small businesses are advocating is for some form of commercial rent control. And apparently City Council members are listening and are receptive.

Interestingly, prior to the last couple of years, the last time that this issue gained momentum and prompted high profile attention by New York City government, media, businesses and intellectuals in terms of a movement toward reforms and protections goes back to the Koch administration in the 1980s though of course the spread of "gentrification" is lamented throughout the time since which over the past two decades saw a real estate boom.**

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**See, e.g., Letter to Editor, Commercial Rent Stabilization Can Work, N.Y. Times, 11/10/1984 (citing pending bill in City Council); John J. Powers, N.Y. Debates Commercial Rent Control, Fordham Urban Law Journal, 1986, vol. 15, at 257, avail. at http://ir.lawnet.fordham.edu/cgi/viewcontent.cgi?article=1535&context=ulj (reciting current positions on issue, e.g., that Mayor Koch categorically disfavored a commercial rent control, but that the matter was studied by a commission, and examining history, and commission conclusions which proposed various alternatives like mandatory commercial lease extensions and binding arbitration, and concluding against enactments by a Legislature based on arguments including distorting market economy).

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Interestingly, as the Fordham Urban Law Journal details in its examination of the history of this issue in 1986, New York had in place a system of commercial rent control starting in the 1940s but that the Legislature allowed to expire in 1963. Id.

What is a Business Owner to Do?

Some of the individuals that personify the discussion include restaurant owners in the West Village, some that are institutions in their own right that border the relatively newly posh Meat-Packing District. These include members of the Greenwich Village Chelsea Chamber of Commerce. One restaurant that opened its doors in the late 1970s started with a monthly rent of $450/month and its current rent is nearly 70 times that number, a figure deep into the five figures. (The proprietor is fond of recalling a "croissant clause" in a prior lease at a different location that pegged increases in rent to the price levels of their croissants, which reflects a bygone era). Their landlord is among the more infamous offenders in harassing residential tenants in buildings throughout the city, and is quick to resort to threats and bordering harassing conduct that might cross the line of legality if it was a residential rather than commercial tenant. Another restaurant cites the problem of a "bus delay" which is a de-facto bus rest stop area that has settled in front of its location which wreaks havoc on the block because it prevents the city sanitation trucks from collecting trash which in turn goes uncollected and sits and accumulates. As part of promoting and purportedly easing "red tape" for small businesses, officials from the Small Business Services appeared on local news (e.g., NY1, Inside City Hall) promoting Small Business Week and the city government agency services but without offering much to advocate for these businesses or help to troubleshoot these problems.

Existing Resources

NYC Small Business Services

This department is supposed to be a "one stop" shop within the city government to help businesses - especially restaurants open mainly by helping them to navigate the permits/approval process. It has a process for asking the city for a devoted "account manager," purportedly one of its services is helping to navigate government. But it is not for troubleshooting community/regulatory/landlord issues, instead focused on permits/approvals, employment practices etc and thus inviting a representative from city government to "help" one's business seems to predominantly invite fear of "red tape," and more problems/challenges than remedy existing ones. Here are links:

Under rent stabilization and related laws protecting tenants, there are certain prohibitions against "harassment" that apply but the list for enforcement against complaints either applies primarily to residential but not commercial tenants or does not squarely cover cases as yours, for example, taking every opening or opportunity to threaten eviction for minimal lease infractions or even no occurrences. For example, this is the list of harassment conduct against which the city protects residential but not much less readily commercial tenants, https://www1.nyc.gov/site/hpd/renters/harassment.page

In Interim, Comply with Lease and Attempt "Retail" or Associational Lobbying

What remains in the interim are makeshift survival mechanisms: In terms of living through a lease extension where the landlord engages in menacing and borderline harassing conduct, threatening legal actions unjustifiably, compliance by the tenant business with the material provisions of the lease is the best defense for pushing back against threats. If the landlord oversteps its rights and happens to sue unjustifiably, where the alleged delinquencies can be disproven, there are judicial remedies for abuse of process. For another restaurant owner trying to rid the storefront of a menacing "bus delay," it becomes faced with having to navigate the city agencies (like the Dept. of Transit) just to have clean storefront.

Pending Legislation in City Council: Small Business Jobs Survival Act

Rent control in the commercial rent context, is seen as too big a reach to overcome opposition by owners of commercials real estate but there is a measure pending that a personal source in the City Council expects will again be moving soon: A recent bill from 2014 gained the support of a majority of the City Council but was not passed. It stops short of proposing full commercial rent stabilization, but it would enact mandatory lease renewals for tenants at rates that are either agreed about or as otherwise fixed by binding arbitration. (As the Fordham Urban Law Journal details, supra, these are some of the same policy proposals that the city examined in the 1980s.) It is called the Small Business Job Survival Act: http://hyperallergic.com/233848/why-the-small-business-jobs-survival-act-is-good-for-artists/.

The emergence of this bill, potentially in the current session, signals a critical shift in public opinion since the last era in the 1980s when these issues were debated but did not have the support to materialize. Since that era, it is hard to miss the drastic scales of rent increases by exponential multiples since that time in commercial rents.

What remains at this current moment though are imperfect set of resources and tools. But this overlooked constituency would welcome inclusion on more policy platforms in the city, and as citywide officials look toward 2017 reelection season, it is an opportune and "win, win" time for officials or candidates to think more about helping small businesses.

Do you know what is in your food? The big-food industry has taken consistent steps to block labeling of GMO foods. Legislatures at the state and federal level often prove spineless when it comes to consumer safety as our politicians are paid by the big-food industry to stay quiet (so as to most easily keep their positions of privilege and power). It is estimated that more than 90% of the soy we consume in the United States is now GMO based. Together with soy, the American diet is heavy on GMO sugar, corn and wheat.

Why does this matter? New studies are emerging drawing into the question the safety of glyphosate, which is the molecule that is commonly used in the herbicide on GMO crops. The plants absorb the glyphosate and then we ingest it in our food. For example, Moms Across America has cited research showing that glyphosate is present in breast milk. Other studies question whether the increased use of glyphosate is linked to birth defects, autism, inflammatory bowel disease, obesity, cancer and other health problems.

Today we wrote to Unilever, the maker of Hellman's Mayonnaise, to ask about the level of glyphosate in their brand of mayonnaise since its principal ingredient is soybean oil (we do not know whether they use GMO based soybean oil, although the odds seem pretty good). We have a client who would like to know

If you have any information or concerns about the use and safety of glyphosate, please let us know via our contact page.

As a self regulating profession, lawyers (and anyone thinking of going to law school) should read this article by Professor Paul Campos called "The Law School Scam."

We are proud to be the firm that brought some of the initial litigation against the law schools for deceptive marketing. While not successful in recovering monetary damages for our clients (caveat emptor unfortunately seemed to rule the day), plaintiffs and attorneys can be proud that the ABA changed its reporting rules. Now law schools must report whether the jobs its graduates obtain even required a law degree in the first place. The result of this is college graduates - the consumers - have decided to not apply to law schoolbecause they know that it is a poor investment decision (intangibles aside). Why risk having $200,000 in non-bankruptcy dischargeable debt if there is no reasonable way to pay it back in your lifetime? The free market is helping with law school applications and admissions declining, but this is not the only answer.

No doubt studying law is a luxury and anyone who can afford it benefits. This could be said as well about advanced studies in art history, biology or computer programming. The important issue that Campos raises however is that the idea the degree should pay for itself is now not true with law school. Some things are still rotten in Denmark and something is still amiss in the legal profession: Students are graduating with enormous amounts of debt, many lawyers since the start of the Great Recession have had trouble finding steady work, and the industry seems to be a bit turned upside down generally. (See for example, the Wall Street Journal reporting that law firms are now competing with their own clients).

Doctors graduate from medical school with large debts but then find work as doctors and make a decent living. It would be great if the same were true for law school. And the only way that this will happen is if the American Bar Association stops accrediting schools that will accept nearly anyone to help finance the exorbitant salaries of law school deans. Based on lackluster bar passage rates of their graduates, the American Bar Association should also consider seriously de-accrediting some law schools since the only interest they seem to be serving is giving the administrators and professors jobs. We need to better regulate how law school advertising is ubiquitous (or do away with it entirely) and state attorney generals need to better scrutinize the spending that these "non-profits" get away with such as paying their deans $500,000 a year when the majority of their students graduate debt ridden and jobless.

Beyond the ABA who helped get the profession into this mess, however, the United States Congress needs to address the issue of giving schools the right to profit from these students. For-profit or not-for-profit, if the school is not serving the common good, it should not have access to the easy money train that Federal Direct Loan Plus Program created. With the non-bankruptcy dischargeable loans, Congress created a "privatized profits and socialized losses" situation that it needs to fix.

Finally, since we know Congress is filled with entrenched elites skilled mostly at blaming the other side of the aisle (or Obama) for all problems near and far, the highest courts of each state should reclaim their inherent authority from the ABA and regulate law schools themselves. Rather than give a blanket "if the school is approved by the ABA, then their students can take the bar exam" the New York Court of Appeals, for example, could create a list of law schools for which it allows students to take the exam. Why give a student a $200,000 bill and then tell them that they are not smart enough to pass the bar? Save them (and possibly the taxpayers) the trouble. We welcome your comments and feedback on our contact form.

Chief Judge Jonathan Lippman announced last week new reporting rules for attorneys. Effective May 1, 2013 every attorney admitted to practice law in New York will be required to report the following information when filing their biennial attorney registration statement:

(1) the number of hours voluntarily spent providing unpaid legal services to poor

and underserved clients during the previous biennial registration period; and

(2) the amount of voluntary financial contributions made to organizations

primarily or substantially engaged in providing legal services to the poor and

underserved during the previous biennial registration period.

As well, the number of pro bono service hours that each lawyer should aspire to give to the underserved is 50 hours per year (increased from 20); although this requirement remains voluntary.

Judge Lippman said, “While the legal profession in our state selflessly provides millions of hours of pro bono work to help people of limited means each year, the civil legal needs of low income New Yorkers are enormous and continue to grow as a result of the uncertain economy and the recent devastation of Superstorm Sandy. I have every confidence that the steps we take today will help increase pro bono service and narrow the enormous access to justice gap in our state."

Kurzon LLP currently represents three clients on a pro bono basis, each of which are not-for-profit organizations in the state of New York. We applaud this rule change and the reform efforts of Chief Judge Lippman.

The Supreme Judicial Court in Massachusetts recently amended its rules of professional conduct (as of January 1, 2013) to require lawyers to clearly communicate their fees to clients in writing. See an article by Bar Counsel Constance V. Vecchione, Counsel to the Mass. Board of Bar Overseers explaining the change. Long gone are the days when lawyers could send an invoice to their clients reading “For Professional Services Rendered” and then the amount owing. Clients deserve to know how much they are being charged and for what. In New York, Rule 1.5 does not require that the fee agreement be in writing (except in a few instances such as contingency fee matters or domestic relations matters). Rule 1.5(b) in New York reads in part:

A lawyer shall communicate to a client the scope of the representation and the basis or rate of the fee and expenses for which the client will be responsible. This information shall be communicated to the client before or within a reasonable time after commencement of the representation and shall be in writing where required by statute or court rule.

Hat tip to Massachusetts for amending the rule to make it clear that lawyers should heed their own advice. Write it down, good counselor, for everyone’s sake.

A senior international lawyer this afternoon told me a story about how he saved his client millions of dollars in taxes by being called in to give a second opinion and helping to restructure a transaction involving access to waterways between cross border entities. I told him a story about one of my first clients after I hung my own shingle. I formed a New York not-for-profit corporation for her and then she told that she shared my work with another lawyer to "just to have it checked out." At first, I was a bit offended. I knew the work I did was top quality. What I forgot, and why I should not have been offended is that she was not a lawyer. There was no real way for her to judge the quality of my work. And in my previous big law life, it was routine to have my work checked by more senior attorneys - so routine, in fact, that I accepted it as normal without even questioning it.

Some of the reasons on why you should get a second opinion, whether it is a corporate or litigation matter, include "your case is costing a lot but you are not seeing results or value for those costs" and "you suspect improper, incompetent or insufficient handling" of a matter. Of course, if you bring your car to a mechanic, pay a hefty bill, and then your car does not work, you are going to get a second opinion.

However, often the car runs fine. But are you sure about what you paid for if you are not a mechanic?

The best reason to get a second opinion is simply peace of mind. People hire lawyers because something of value is at stake - whether it is managing a risk, prosecuting or defending a claim, or making a deal happen - and therefore, the thought goes, they want it done right. However, without a $150,000 law degree and many years in practice, the non-lawyer is usually not in a position to judge a lawyer's work. While sophisticated business people often know more than many lawyers, the usual scenario is that they are hiring their lawyer or lawyers to look out for their best interests (as fiduciaries and counselors) and add value to the matter at hand. If you have any doubt, a second opinion is right for you. And the more value is at stake, the more sense it makes to just do it.

But then do you need a second opinion on your second opinion? If the second opinion reveals that your lawyer is handling the matter professionally and at market rates, probably not. If the second opinion raises issues pertaining to the quality of your lawyer's work, their cost, their availability to you as a resource or any other number of issues, you can choose to do a number of things. First would be to address your attorney(s) with those concerns. This could be a warning sign for them that if the problem is not fixed, you will exercise your right to terminate the relationship and find new counsel. If your attorney does not handle your concerns such as to satisfy them, you may then wish to seek opinion of a third counsel. This process can go on and on.

Fret thee not, as it would not be reasonable to hire ten attorneys to help you draft your last will. However, public company executives, acting on behalf of shareholders, should definitely hire a second set of eyes to watch their legal counsel. Relationships between in-house counsel and outside counsel may create a conflict, or in-house counsel, where they exist, may not have experience in the field for which outside counsel is hired. Those individuals or smaller companies without in-house counsel who regularly hire attorneys should consider doing it every so often as well. The second opinion will provide you the peace of mind that your lawyer is really looking out for you. And when we have clients who seek second opinions, rather than take offense, we welcome it as we know it will ultimately improve the quality of service we provide.

King Longshanks is quoted in Braveheart as saying "The trouble with Scotland is that it is full of Scots." It may also be said that the trouble with the legal profession is that it is full of lawyers. And yet often by the time you really need one, the trouble caused is a lot worse than if you hired one to prevent the problem in the first place.

Lawyers are expensive, but this may be more perception than reality. While the advent of companies like Legal Zoom have made it easy for anyone to start a business and become a business owner, many of these business formation companies do not offer legal advice. And what this typically results in, is that a business owner is left with a lot of unanswered questions and is not assured that their company will actually provide them limited liability.

Our firm will ask you questions and examine your corporate documents to make sure that they are in order. Our goal for our clients is to make sure that everything is up to speed, to answer your questions, and then to have you refer us to your business owner colleagues.

You want to run your business with the peace of mind that you have limited liability. You want to be sure you have taken all the required steps. Often times entrepreneurs are in such a rush to get their business doors open, that they forget that their corporation needs an annual meeting of shareholders (we can provide the paperwork) or that they have a limited amount of time to sign their LLC's operating agreement. By not respecting the corporate form, you jeopardize your legal entity status and put your personal assets at risk.

We are happy to help draft your LLC operating agreement for single or multi-members. And we are happy to draft your corporate minutes and annual meetings.

Contact us today to set up an appointment to have your legal entity analyzed and your questions answered to make sure that you are managing your business the right way.

We initially announced this in a post calling it Corporate Legal Diagnostics (TM) in an effort to help small businesses and entrepreneurs in New York ensure that they are in legal compliance with state and local laws with their business.

This post we thought could be for fellow lawyers, but nearly 80% of the US economy is based on services, thus we hope it will be helpful to a large number of our clients and others seeking to develop business in their own field.

1. Recognize, that There is No Secret Rule. If there were, we would not be writing this blog post – we probably would not want to share the magic secret sauce. Your own unique, talent and skills are what make you who you are and you simply should make the best of them. You will be rewarded for your hard work and persistence. So put your pants on, pull them up tight and do what you do best. You will do great if you believe that you will. We do.

2. Act Like a Professional. You do not need to be the best dressed, the best looking or the smoothest talker. You do need to act like a professional. What this means is probably the subject of another post: e.g., if you are a lawyer, you need to always follow the Rules of Professional Conduct. If you are a doctor, really listen to your patients’ concerns. You know your industry and will aspire to the highest ethical and professional standard. If you do not know the answer to something, that is fine - say that you will look it up.

3. Do the Highest Quality Work. Your work is what defines you. Pay attention to detail. Despite your best efforts, a typo of some sort may send a client the wrong impression. Some attorneys get clients when their opposing counsel notices the caliber of their work and then refers them business. Your clients will tell their friends. Make your high school English teacher proud.

4. Admit Mistakes and Fix Them. Despite your hard work and highest quality work, lawyers are humans (insert joke) and humans err. When you recognize a mistake you made, point it out to your client and offer to fix it free of charge. Clients will respect your honesty. Sweeping a problem under the rug will make it fester and will likely lead to the loss of a client.

5. Everyone is a Potential Client. Some are of the belief that to develop clients you need to be a Johny Appleseed and spread your business card from here to Timbuktu. More importantly, it is important to treat everyone with equal respect as you never know who may need your services. When we launched our business in 2010, a senior lawyer came to our event and told us a prophecy that is true – you never know where your clients are going to come from.

6. Treat Your Clients How you Would Like to be Treated – You are probably charging your clients a lot of money. Do you really need to bill them every time they have a quick question you can answer in five minutes? Do you need to invoice them for stamps? This is the obvious “do not nickel and dime your clients,” but there is more. For example, you are really busy with a project and a client contacts you by e-mail. Do not ignore it. Especially a phone call. Clients will understand if you are busy, but you need to communicate since they want to know right away that you will eventually get to it and the when is less important than the certainty they desire that you will get to it.

7. Stay in Touch with Those You Meet. This is perhaps the hardest since everyone’s time is limited. Some people have described the concept of ‘touchpoints,’ which means the more you stay in contact with someone, the more likely they are to refer you business. Remember that Stevie Wonder song “I Just Called to Say I Love You?” Do not take this overboard, but if you find something of interest to one of your colleagues or friends, send it their way. They will appreciate that you were thinking of them, but only if it is sincere. Finally, along the same lines, it is always better to stay in touch with people in person than by telephone; it is always better to call someone than to email them; and it is always better to send a personal email than a mass email. Obvious, perhaps, but worth reminding you.

Thanks for reading and please feel free to share some of your rules in the comments section below. Special thanks to our former Intellectual Property Advisor, Rick Lehrer, for his contribution to this post.

CEOs, marketers, production supervisors and even American consumers would be well served by reading Shaun Rein’s first book, the End of Cheap China. The book is filled with action items at the end of each chapter to help display and counter thinking of myths related to China’s rise since the tumultuous Cultural Revolution. Each action item offers solutions for those seeking to do business with China or Chinese consumers.

Rein is of mixed Chinese and Jewish heritage and after growing up in and attending the best schools that North America has to offer has spent his adult life in China. The book is part history, part anthropology and part business, written from the perspective of an outsider with an intimate knowledge that can only come from his more than ten years on the ground experience of living and traveling in China. Rein’s firm, the China Market Research Group, provides fuel and anecdotes throughout the book to help the reader understand contemporary China. What is unique is that he is able to juxtapose interviews of billionaires and business titans with everyday Chinese and their aspirations for a better future.

The book appears honest in that it is clear that Rein is a fan of China and wants to help the world better understand its complexities, but does not stop short at criticism (hence why I think the book is banned in China). Censorship is itself a topic throughout the book (as well as corruption) and is explained through the lens of history and the goals of China’s government and Chinese government officials.

Why Chinese consider KFC healthful (!), who benefits from a low renminbi valuation, and what protections are in place to prevent a collapse of the Chinese real estate market are examples of the breadth of topics covered in the End of Cheap China. The book also seeks to raise debate on the future of China – for example, how will it exercise its new hegemonic power (addressing the how and why of China’s expansion into Africa) – and what aspects of China’s government, from the local level to Beijing, will need to adapt as China’s economic engine continues to grow. Certainly the book is recommended for attorneys who have clients that do business in China, as a means to better understand the landscape in which their clients operate, but should also appeal to anyone looking for answers about today’s China and those curious thinkers who want to look ahead to tomorrow’s China.

Starting a business is one of the most exciting things you can do. Is it best to operate as a sole proprietor, a partnership, a limited liability company ("LLC") or a corporation? Are the benefits of limiting your liability worth the costs involved? If you are starting the business with a partner or an investor, what steps will you take to make decisions and resolve (and avoid) disputes? How will you deal with the inevitable departure of one of the business partners or investors? By having a good partnership, LLC operating or shareholders' agreement, you can help avoid the errors many enthusiastic entrepreneurs make when they hastily form a business relationship without these documents or try to do it by themselves.

In order for a business to grow and develop, it often needs the advice of an experienced attorney. Without the help of an in-house general counsel, the small company must rely on outside counsel to enter into a lease on the most favorable terms, or to develop standard form agreements for its customers, suppliers, employees and independent contractors. As well, privacy agreements are needed to protect the intellectual property belonging to the founder(s) or the company. Kurzon LLP can help with all these matters efficiently so as to help a start-up company preserve its limited capital.

Financing Your Business for Growth

In order for a business to really grow, it needs capital to make investments in equipment, supplies and human resources. Your company may be seeking to do a round of angel (or seed) capital to help you get going initially with friends and family. It is just as important to document a transaction thoroughly when dealing with close associates, family and friends due to the possibility of a dispute looming in the not-so-distant future, especially when the business is successful and there is something worth fighting for. If your business is past its initial capital stage, and would like to work with venture capital, it is essential that a small business have an experienced attorney to negotiate the terms that a venture capital firm will impose. In exchange for venture capital's commitment of time and monies to the company, they usually provide terms most favorable to them. Experienced attorneys are able to help the company navigate the onerous documentation that can come with financing, which can be negotiated to be more in the company's our founder(s)' favor. With regard to financing companies' growth, our corporate attorneys in NYC have experience in dealing with equity financing, bank loans, promissory notes, other forms of loan agreements, convertible notes and joint ventures, each of which may be an excellent way for your small business to raise capital and grow.

Exit Strategies

Often, the founder of a business or an investor would like to exit the business, either partially of fully. It may be related to a dispute with the other business owners or simply a desire to cash in on success. What are the restrictions on transfer of a stock? Will the transaction trigger any pre-emptive rights, co-sale or tag-along rights? If the entire business is being sold, we can help ensure the business purchase and sale agreement is accurately drafted. An experienced mergers and acquisitions lawyer should help draft and negotiate these agreements to avoid surprise and possible litigation later.

With all our clients and for all our practice areas, we seek to be skilled legal advisors, problem-solvers and trusted confidants to ensure thoroughness, candor and results.

Consider hiring us as your corporate attorneys in NYC. We are experienced business attorneys in New York.